The first year of spot Bitcoin exchange-traded funds (ETF) in the US exceeded all expectations, marking a historic debut that reshaped both the Bitcoin market and traditional finance.
Following approval from the US Securities and Exchange Commission on Jan. 10, 2024, US spot Bitcoin (BTC) ETFs began trading the following day.
In less than a year, they have contributed to 100% of the $44.2 billion in inflows to crypto investment products globally.
To mark one year since the ETFs launched in the US, Cointelegraph reached out to several ETF providers and analysts for their insights into why the US became the global leader in Bitcoin ETFs in 2024.
US spot Bitcoin ETFs: Expectations vs. reality
The pace of inflows to US spot Bitcoin ETFs has been strong since they launched, with industry leaders taken by surprise at the pace of adoption.
“Our estimates were a much more modest $14 billion for the year, far surpassing our expectations obviously and far above pretty much every other prediction,” CoinShares head of research, James Butterfill, told Cointelegraph.
While BlackRock’s Bitcoin ETF hit $61 billion in assets under management (AUM) in less than a year, its gold ETF took 20 years to reach a $33 billion AUM, Butterfill noted.
“I was extremely bullish on the spot US Bitcoin ETFs, as the crypto community has been discussing them for over a decade,” Matt Mena, crypto research strategist at 21Shares, said. “I expected $15 billion in net flows, but what we’ve seen has completely blown my expectations out of the water,” he added.
“We expected a successful spot Bitcoin ETF launch, but one year later, the impact is much greater than we expected,” VettaFi’s head of sector and industry research, Roxanna Islam, said.
Best-performing ETF launch of all time
One reason for the massive success of US spot Bitcoin ETFs in 2024 was long-running anticipation and demand from institutions to gain exposure to Bitcoin without complexities of self-custody or direct crypto ownership, Mena said.
Mena also mentioned interest cuts by the US Federal Reserve and promising crypto policies under the incoming administration of US President-elect Donald Trump.
Bitcoin’s price appreciation, coupled with long-time demand, made US spot Bitcoin ETFs the best-performing ETF launch of all time, Bitwise chief investment officer Matt Hougan said.
“Bitcoin is the best-performing asset in history.”
Hougan said that broader events like Bitcoin’s fourth halving in April and concerns about the rising US debt were also contributing factors.
The Bitcoin price has surged 103% since the SEC’s approval. Source: CoinGecko
Another reason contributing to the success of the ETFs was their introduction when Bitcoin’s price was historically low, CoinShares’ Butterfill said.
The SEC’s approval itself was also a big factor as it eased investors’ fears that regulators might ban Bitcoin entirely, he added.
What’s next for US spot Bitcoin ETFs?
After breaking all expectations in 2024, US spot Bitcoin ETFs are well set for another strong year, industry executives and analysts agree.
“ETFs are multiyear stories,” Bitwise’s Hougan said, adding that the second-year inflows tend to exceed the first-year results in “nearly every case,” with more investors gaining access to the products in the coming year.
“The reality is that most professional investors still are prohibited from accessing Bitcoin ETFs. That will change in 2025, and I expect 2025 flows to significantly exceed 2024’s.”
“We expect momentum to continue into 2025 and for the crypto ETF ecosystem to expand alongside growth in the broader crypto industry,” VettaFi’s Islam stated.
Related: Bitcoin ETFs scooped up almost 3X more BTC than produced in December
As BlackRock’s iShares Bitcoin Trust (IBIT) ETF dominated Bitcoin ETFs with $37 billion inflows — accounting for 83% of all crypto ETF inflows from the US in 2024 — some might question whether smaller Bitcoin ETFs can survive.
However, a scenario where issuers like BlackRock gradually displace demand for other Bitcoin ETFs is not happening, Bitwise’s Hougan said.
“If you look at any area of the market where multiple ETFs are providing similar exposure, you find that assets are distributed among those ETFs,” Hougan said, adding:
“Some are bigger, and some are smaller, and there are often one or two really large ETFs. But there is no market where one ETF gathers 100% of the assets, and in markets that attract tens of billions in assets, there are consistently multiple very successful ETFs.”
CoinShares’ Butterfill also suggested that US Bitcoin ETFs will continue to dominate the global crypto ETF industry, with no other market potentially eclipsing them in the coming years.
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